CAS Exam MAS-I Fall 2019, Question 23
Study guide: Exam MAS-I
You are given the following information about losses covered by an insurance company:
- Individual losses follow a lognormal distribution with
(\mu = 8,\ \sigma = 1) - For insurance payments, an ordinary deductible of 1,000 per loss applies
- Losses below the deductible are not reported to the insurance company
Calculate the mean payment made by the insurance company.
- A) Less than 3,900
- B) At least 3,900, but less than 4,200
- C) At least 4,200, but less than 4,500
- D) At least 4,500, but less than 4,800
- E) At least 4,800
Answer this question and see the worked solution